Healthcare in the United States suffers from a lot of misinformation, complexity, and service barriers like incomplete health records, and fragmented care networks. If internet memes are anything to go by, patients are frustrated by healthcare services. In an age when you can manage your 401k, schedule a car rental, and even pay taxes without leaving your bed, the complexity of simply finding a in-network doctor and scheduling a call can be enough to stop someone from making necessary medical appointments.
In China, an insurance company found a brilliant solution to these persistent healthcare problems. It’s a truly comprehensive, one-stop-shop healthcare platform. Its success provides a model for healthcare in the United States.
Chinese healthcare has been going through a revolution driven by both public and private initiatives. Under the “Healthy China 2020” initiative, the government requires that insurance will cover 70% of costs by the end of 2018, and that all residents will have affordable basic healthcare by 2020.
China’s largest insurer, Ping An, has embraced platform innovation and developed Good Doctor in 2014. Ping An Good Doctor is an end-to-end healthcare service and insurance app. The platform combines different platform types such as fintech services for insurance, a healthcare marketplace, telemedicine, and more.
Good Doctor’s IPO in April 2018 raised $1.12 billion. In the first half of 2018, its revenue rose by 150.3% year-on-year to about $163 million. By mid 2018, it boasted 228 million registered users, 48.6 monthly active users, 531,000 average daily consultations. Note that the platform business is independent of Ping An Insurance, but was incubated in Ping An Technology before being spun off (which, by the way, perfectly matches our blueprint for successful corporate innovation).
Ping An Good Doctor solves a lot of sticky problems in access to healthcare. It has created universal digital health records that are accessible by all healthcare providers regardless of whose payroll or network they’re on. The app also connects to a healthcare marketplace with over 178,800 SKUs for drugs, equipment, and supplements.
Most importantly, it connects users to doctors 24/7. Unlike most insurers that work with a limited network of doctors, or telemedicine companies which pay for doctors and nurses to make themselves available for consultations, Good Doctor is open to external healthcare providers. Good Doctor does maintain a small staff of doctors on payroll, which represents a tiny minority of all the doctors on the platform (2% in 2015). Most importantly, telemedicine streamlines bookings, and saves time and travel for patients who can be screened at a distance then referred to the right physical care centers near them – such as specialists or labs for diagnostics.
Taken from Ping An Good Doctor’s 2018 Company Presentation.
Ping An Good Doctor is the future of healthcare. US politics have long been debating the answer to the healthcare question, primarily “who should provide it?” Ping An Good Doctor provides a private insurance model that can be replicated by a large enough insurer in the United States with vast regional coverage. Insurers already touch both consumers and doctors, and they have all the data on prices and care quality that they would need to facilitate seamless transactions.
For example, the platform could offer fees to doctors that are tiered in accordance with the insurer’s coverage options. Doctors then self select into the platform. This removes the lengthy and tedious process of individually finding doctors and negotiating fees with them. As the platform’s users grow, doctors that were unreachable under the old insurance model (because they are too far, or too small or simply didn’t turn up in a desk search) would opt into the marketplace of their own accord.
Telemedicine companies like Teladoc, Chiron Health, and Virtuwell can also build on existing technology and connections to grow their offering into a truly open healthcare platform. By working with insurance companies as partners, doctors can join the telemedicine platform on pre-arranged terms that suit their needs,
Alternatively, large healthcare provider networks, like hospital chains, would benefit from investing in a platform like Good Doctor to connect basic care infrastructure around each hospital to the hospital’s offering. Hospitals would solve pervasive personnel cost issues, which could help make hospitals more price competitive and affordable to patients.
In addition to lowering consultation fees, the drugs, equipment, and supplements healthcare mall would also put downward pressure on prices. As patients have access to a fuller catalog of products, manufacturers and distributors will increasingly need to compete against each other on price. The insurer also reaps the benefits of lower costs when insuring drugs and devices.
Insurance companies have long been saying that providing access to high-quality and affordable healthcare is their number one priority. However, given rising premiums and shrinking care networks, it’s been difficult for the public to believe that’s their mission.
Ping An’s model aligns with most health insurers’ and providers missions and visions. The main difference is that Ping An Good Doctor is finding new ways to accomplish it. If US health insurers want to improve their model too, at massive scale and profit, then they should look to platform innovation and build a Good Doctor of their own.
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